Posted
by
msmash
on Thursday November 24, 2016 @05:45PM
from the what's-happening dept.

Electric vehicle maker Faraday Future may not be able to make its first cars in time to hits its 2017 shipping deadlines, according to a new report by the Financial Times. From a report on TechCrunch: It's hard to ship a car when your factory itself isn't finished, is the main issue -- FF's Nevada-based manufacturing facility broke ground in April, but construction has since been paused because, according to state treasurer Dan Schwartz speaking to the FT, it hasn't paid bills owed by the company to its construction partner. The delay is temporary, according to comments made by general contractor Aecom, which is working with Faraday on the project, and construction will resume sometime in early 2017. That's going to push out the completion date considerably, and will make it quite difficult for FF to make its previously stated production timeline. FT also spoke to an anonymous former employee who said deliveries to customers within the 2017 timeframe were "not possible."

Chinese consortium Covec was supposed to build A2 highway in Poland for the Euro 2012. Then in middle of construction they quietly stopped paying subcontractors while still receiving payment form the government, and finally moved their staff back to China when whole thing started hitting papers.

I've just read the Wikipedia page [wikipedia.org] on Faraday Future. I can't make sense of this from a business point of view. It is a Californian company funded by Chinese capital.

From Wikipedia:"In July 2015, Motor Trend ran an article that provided a few specifications for Faraday Future’s proposed electric vehicle: it will have 15 percent higher specific energy than a Tesla Model S, it utilizes a multi cell solution where both individual cells and groups of cells can be replaced, and it will have a modular design for improved mass-production methods."

OK, this is good - they have a point of difference, some things they think they can do better than Tesla or Nissan. But successfully starting a new car company requires either a niche you can exploit and then expand from, or huge amounts of money. Tesla used the niche method, but I can't see that this will work again, at least in markets where Tesla, Nissan etc have a presence. Both this story and other evidence (Wikipedia article) suggest they are short of capital, so the other method doesn't work either.

In any case, whatever their business plan, why would they think the USA is the place to do it? They have better connections, cheaper labour, a bigger and probably less competitive market in China. A thought that occurred to me is that this is a feint, they're really just getting a bunch of American engineers to do some designing, then they'll fold up and take the designs back to China. However, this also doesn't really hold up - I don't see that Chinese engineers wouldn't be up to the task, and even if they weren't, it would be much cheaper to offer $500,000 salaries to American engineers.

Yes. It all makes sense if they are intentionally trying to obscure their real ownership and objectives. There are many rumors that they are actually a front organization for another company. Most rumors focus on Apple as the real owner behind the curtain, and the money is being channelled through a Chinese company so they aren't taxed on repatriated profit.

I can't tell you if their particular business case makes sense, but there are other automakers building cars in America. One reason is that labor costs are rising in China and that it can actually be cheaper to build them here than to build them in China and ship them. Most of the cost of a car isn't in the assembly. It's in the R&D, production equipment like metal stamping dies, and in the parts which are mostly bought from other makers.

Doesn't help they wasted all their time and effort into that silly futuristic concept car that they never had any intention on selling. That's fine when you're Toyota and have unlimited resources. When you're a small start-up like Faraday Future, you can't waste resources on vanity projects, you need to get a product out the door. Build the factory, start making cars you intend to sell, before you make silly eye-candy for vanity that you'll never sell.